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Reasonableness of Compensation (LO. 5) Sonya owns 64 percent and her sister Karen owns 36 percent of the Tanglewood Group. They inherited their ownership from their mother, who died in 2018. Sonya is the president and chief financial officer of the corporation and receives a salary of $134,000, which is reasonable given her duties and responsibilities. Karen, who is vice president, is paid a salary of $66,300. She is not actively involved in the business and views her ownership as an investment. Determine how the payments to Sonya and Karen are treated for tax purposes if:
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Reasonableness of Compensation (LO. 5) Sonya owns 64 percent and her sister Karen owns 36 percent of...
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